Financial statements analysis

Contents
=> Introduction to financial statements and their differing objectives
=> Schedule VI of The Companies’ Act format for Balance Sheet and Profit and Loss statements
=> Limitations on Schedule VI balance sheet format and need for regrouping in the “Analytical” form of balance sheet to overcome these limitations
=> Financial ratios and their usefulness
=> Inter-firm and intra-firm analysis
=> Limitations to financial statement analysis and study of financial ratios
=> Funds flow statement and its construction from balance sheet as on two successive annual dates with additional information
=> Numerical exercises on:
Financial statement analysis and calculation of ratios
Interpretation of these ratios
Funds flow statement preparation

At the end of the chapter the student will be able to
=> Regroup the assets and liabilities in the “Analytical form” of balance sheet
=> Calculate the financial ratios relating both to Profit and Loss and Balance Sheet
=> Interpret the financial ratios for their impact on business enterprise
=> Appreciate the limitations to the study of financial statements and ratios
=> Prepare funds flow statement given two successive dates balance sheets

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